TMTB EOD Wrap

QQQs slightly down ahead of Powell tomorrow. Yields fell 1-2 bps across the short end of the curve after some better retail sales data, but fed expects remain largely unchanged with about ~70bps worth of cuts priced in for the rest of the year. Dollar is hitting fresh 52wk lows. Most investors expecting 25bps rate cut tomorrow with a more dovish shift in messaging.

This afternoon, WSJ had more details on the potential Tiktok deal:

TikTok’s U.S. business would be controlled by an investor consortium including Oracle , Silver Lake and Andreessen Horowitz under a framework the U.S. and China are finalizing as talks shift into high gear, according to people familiar with the matter.

The arrangement, discussed by U.S. and Chinese negotiators in Madrid this week, would create a new U.S. entity to operate the app, with U.S. investors holding a roughly 80% stake and Chinese shareholders owning the rest, the people said.

This new company would also have an American-dominated board with one member designated by the U.S. government.

Existing users in the U.S. would be asked to shift to a new app, which TikTok has built and is testing, people familiar with the matter said. TikTok engineers will re-create a set of content-recommendation algorithms for the app, using technology licensed from TikTok’s parent ByteDance, the people said. U.S. software giant Oracle, a longtime TikTok partner, would handle user data at its facilities in Texas, they said

META +2% rallied some with the implication being that likely will be good amount of disruption at Tiktok on a shift and also churn if users are forced download a whole new app (Tiktok still has 170M MAUs, so even a modest 5-10% drop off as users download a new app and accept T&Cs would be significant share that likely flows to Instagram or Reels)

Let’s get straight to it…

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INTERNET

• META +2% leading up to META Connect tomorrow where the vibe I feel from investors/consumers is more excited than I’ve seen before for a META glasses release. We also get both a Zuck and Wang interview tomorrow evening on TPBN:

• First round of Ad checks from UBS were positive for GOOGL/META/PINS

• DUOL -1.5% as their DuoCon event was a dud today with not much new announced…mgmt spotlighted three themes: a broadened roll-out of “Videocall with Lily” (AI-tutored speaking sessions now available to all Max subscribers), a deep dive into Duolingo’s always-on A/B experimentation engine that serves millions of test variants daily, and an update on the new Chess learning track launched in April.

• WIX 4% as investors continue to appreciate value added by Base44 acquisition. MS also had a note out this morning saying web traffic trends upticked in August (+3% y/y) against tougher comps and said stability in top of funnel helps alleviate AI/competitive disruption narrative.